Vocal proponent of smaller enterprise, Louise Beaumont, believes UK SMEs continue to suffer under the realm of traditional banks. Beaumont is Head of Public Affairs at GLI Finance, a firm that is in the innovative finance space providing new forms of finance.
The Bank of England released its monthly credit statistics this week indicating lending to business decreased by almost a billion pounds. The BoE states;
Loans to non-financial businesses Loans to non-financial businesses decreased by £0.9 billion in September, compared to an average monthly decrease of £0.1 billion over the previous six months. The twelve-month growth rate was -0.9%. Within this, loans to small and medium-sized enterprises (SMEs) increased by £0.2 billion, broadly in line with the average over the previous six months. The twelve-month growth rate was 0.3%.
While SME funding ticked up a bit, the growth remains rather tepid. Beaumont states;
“These statistics clearly show that the growth of UK SMEs is being choked by a continued inability to access the capital crucial to the development. Traditional credit availability has basically flat-lined and the alternative finance sector has started to fill this critical gap. The Government must speed up the implementation of the Small Business Enterprise and Employment Act to enforce the much needed mandatory referral system. They must also drive forward initiatives to raise the awareness of alternative finance to SMEs and the benefits this can provide. Only then will the financial shackles on high-growth businesses be lifted to the benefit of the UK economy.”